Right now, wage growth is perhaps the sharpest indicator of the state of the economy. While employment has shown signs of better than expected growth, the story of the economy in the past few years has been one of low demand.

Australia's wages growth slips to 2.2%, the slowest in 18 years, figures show.

Demand is all about people and businesses wanting things: wanting products or services to buy, and wanting people to work for them in order to make or sell those products and services.

In the December quarter, wages in the private sector grew by just 0.49% – the second lowest amount ever – bested only in the deep dark days of the global financial crisis in September 2009:

Maybe we need some government spending, running out a real NBN at top speed say. All this crap about a surplus has to stop.

In 2015, the underlying inflation growth rate (which takes out the bumps and falls in some prices to get a more steady figure) was also staggeringly low – reflecting the lack of demand in the economy. The Reserve Bank’s trimmed mean measure of underlying inflation for 2015 was 2.13% – just 0.03% points below the trend wages growth for both public sector and private sector workers in 2015 of 2.16%.

Thus in 2015, on average, Australian workers’ purchasing power (or real wages) grew by just 0.03% – basically nothing:

Agile, Innovative—how unreal and irrelevant all this Lib crap is. We need the NBN and that is that.

Also a concern, as noted by senior Westpac economist Justin Smirk, is that the growth in hours worked and wages growth is now very disjointed. Normally, when the number of hours worked is growing strongly – as it was in 2015 – wages growth is also strong. That’s not happening at the moment:

It means workers are increasing their work, and employers seem to have an increased demand for that work, but it is not flowing through to workers in higher wages.

Why that is the case is unclear – perhaps due to both unions and employers having very low expectations for inflation, perhaps the hours worked data is a bit iffy. But it is pretty strong evidence that the industrial relations system is not loaded in favour of workers, despite what business leaders might suggest.

The lower than expected wages growth and the utter lack of real wage growth also suggests the pressing need for government is not bracket creep. Rather it should be looking at how to raise demand such that wages may actually grow in a way that sees bracket creep once again something to worry about.

Everything the idiotic Libs have done is wrong: wrong assumptions, wrong ideology, wrong IR policies, wrong decisions when they do make a decision.

Casualisation of the workforce, 457 visas handed out by the bucketful could be behind this, how widescale is the 7/11 style exploitation and cheating by employers exactly?

And then you hear Snot Morriscum crapping on about bracket creep and you it is just wrong, wrong wrong!

I think the handing out of 457 visas like confetti, the disastrous FTAs rushed into under abbott and howard, the driving off of the car makers is Lib ideology run mad: destroy the unions even if you destroy the economy.

Abbott & Co are going to cause the mother and father of all recessions—be prepared!

Australia's economic growth was a higher-than-expected 0.6 per cent for the December quarter and 3 per cent for the year, according to the Bureau of Statistics.

Good, but:

While the mining investment boom is winding down, the production boom is well underway.

With 'real' GDP measuring output, not the prices received for that output, mining was actually the main sector contributing to annual economic growth, along with financial and insurance services (both added 0.4 percentage points in trend terms).

George Megalogenis on the management of the transitioning open economy:

The debate we have to have is on the role of government in the economy. It is being forced on us by the market failures of the twenty-first century. Both sides cling defensively to the open model because it tells them a reassuring story of Australian success. But that open model has been exhausted by capitalism's extended crisis and the end of the mining boom. It cannot guarantee prosperity in the future without an active state. Once politicians understand this, they can release themselves from the spell cast by the leader they wish to be, Paul Keating.The open model excels when the economy is strong, and in response to a global shock. But it struggles when the economy is in transition, because the market forces it is responding to are compromised. The four components of the model are a floating currency, low tariffs, interest rates set independently of the government, and wages determined directly by employer and workers above a minimum standard. Each is now delivering perverse results that are actually increasing the risk of recession.

All the elements of the open model operated with textbook efficiency in the global financial crisis. The currency tumbled, interest rates were slashed and employers spared their workers from mass retrenchment by reducing the hours they worked. The Rudd government's cash handouts were effective because they complemented these measures. The need for fiscal policy now is to relieve the open model from a burden it was never designed for – managing an economy in transition. I am not arguing for stimulus to tide us over until capitalism resolves its crisis, but for a permanent change in the relationship between the state and the market.

Government must reclaim responsibility for the areas of public policy that will prepare us for the future – most notably, education and infrastructure.

Australia's unemployment rate fell from 6 to 5.8 per cent in February because a large number of people gave up looking for work.

Key points

Unemployment falls from 6 to 5.8 per centOnly 300 jobs added in February: +15,900 full-time, -15,600 part-timeAustralian dollar hits 76 US cents on the dataThe Bureau of Statistics estimated that only 300 jobs were added in February, but unemployment still fell because the participation rate dropped.

Seasonally adjusted figures point to a 0.2-percentage-point fall in the proportion of the adult population in work or actively looking for it.

The fall in participation saw the key monthly hours worked figure go backwards slightly, while the employment-to-population ratio also eased to 61.1 per cent.

In more positive news, the quarterly figures show a slight improvement in underemployment.

The ABS said the underutilisation rate (which combines those who are unemployed with those who are working less hours than they would like) has edged 0.1 of a percentage point lower to 14.2 per cent.

Our steel makers are going broke because of cheap dumped Chinese steel (a bridge or building etc somewhere is going to fail and cause many deaths because the Chinese crap is not suitable) and the Libs do nothing except insist we need the ChAFTA while our products get frozen out of China:

If you put credence in the figures you can rejoice that unemployment has dropped to 5.7%, youth unemployment also dropped by .1% to 12.1%.

I do not put much credence in the figures, ABS itself says not to.

Unemployment is still higher than when the shambles took office!

The ABS:

MARCH KEY POINTS

TREND ESTIMATES (MONTHLY CHANGE)Employment increased 7,700 to 11,910,000.Unemployment decreased 2,800 to 729,600.Unemployment rate remained steady at 5.8%.Participation rate remained steady at 65.0%.Monthly hours worked in all jobs decreased 1.8 million hours to 1,643.7 million hours. [My emphasis.]

SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE)Employment increased 26,100 to 11,909,600. Full-time employment decreased 8,800 to 8,180,400 and part-time employment increased 34,900 to 3,729,200.Unemployment decreased 7,300 to 723,100. The number of unemployed persons looking for full-time work decreased 7,900 to 515,900 and the number of unemployed persons only looking for part-time work decreased 1,800 to 208,400.Unemployment rate decreased 0.1 pts to 5.7%.Participation rate remained steady at 64.9%.Monthly hours worked in all jobs decreased 17.5 million hours to 1,632.3 million hours.

The decrease in hours worked shows the employment figures are a joke. Less work done, not more, part time work not more. Low wages growth—stagnation.

Abbott & Co are going to cause the mother and father of all recessions—be prepared!

Bureau of Statistics data show the jobs growth was entirely in part-time work, with 34,900 jobs added, while full-time employment declined by 8,800, seasonally adjusted.

This shift to part-time was also reflected in the number of hours worked, which slipped by 17.5 million to 1,632 million in March.

Deutsche Bank economist Adam Boyton said the falling number of hours worked were a weak spot in otherwise solid data.

“The collapse in hours worked in March (down 1.1 per cent month-on-month, up just 0.7 per cent year-on-year) and the fall in full-time employment (of 8,800) makes the March employment report weaker in the detail than the headlines,” he wrote in a note on the figures.

An unexpectedly sharp fall in inflation has raised the chances of a surprise cut in interest rates at next week's Reserve Bank board meeting.

Figures released by the Bureau of Statistics data show consumer prices fell for the first time since December 2008, with deflation of 0.2 per cent in the March quarter.

Headline inflation over the year was just 1.3 per cent, well below market expectations of a 1.7 rise driven by 0.2 per cent quarterly increase.

The surprise result saw the Australian dollar tumble more than 1 cent to around 76.4 cents against the US dollar as economists said there was now a strong chance the Reserve Bank would cut interest rates at its meeting next Tuesday.

The RBA's preferred measure core of inflation — which strips out items such as fuel and fresh food — came in at just 0.15 per cent for the quarter and an annualised rate of a record low of 1.55 per cent, well below the target inflation band of 2 to 3 per cent.

Yes—we are moving to deflation, or the possibility of that has increased, but lowering interest rates has no effect. Once you cut to 2.5% monetary policy easing has no effect. A few more idiots might by a house to live in or investment but when monetary policy tightens mortgage shock will be huge.

Inflation number a 'game changer' for RBA

JP Morgan economist Sally Auld said the inflation number was a game changer for the RBA and she now expected a 25-basis-point cut in the official cash rate to 1.75 per cent next week.

"There is enough 'signal' — rather than noise — in the last couple of inflation prints to convince the RBA that the disinflationary trend is genuine, and moreover, has not stabilised," Ms Auld said.

Citi's Josh Williamson described the result as "a shocker" and said a rate cut on Tuesday was very much as 50:50 proposition.

Mr Williamson said it would now take at least another three quarters before inflation could return to the bottom of the RBA band.

"This may be longer than the Governor expected when he made the comment late last year that he was prepared to let underlying inflation move below the bottom of the target band for a period of time without becoming concerned," Mr Williamson noted.

The falls were broad based across 6 of the 11 key CPI groups, however biggest impact came from tumbling fuel prices, down 10 per cent for the quarter and fruit which fell 11.1 per cent.

Offsetting these volatile items were rises in the cost of secondary education up 4.6 per cent, pharmaceutical goods up 4.8 per cent and a 1.6 per cent lift in medical services.

Cutting rates won’t change the weather or the price of petrol, so what is a cut in interest rates going to do?

Something weird is happening. The shambles cof a govt of ours is borrowing heavily, increasing our debt level. It does not seem to be retiring old debt with new, much cheaper debt. It is not spending the money in the economy and is in fact practising austerity which is why we are seeing hours worked decline as full time jobs disappear and part time jobs grow—reflected in a decrease in headline unemployment while underemployment grows.

Cutting the interest rate below 2% will do nothing except kick savers in the teeth. This could be what a neocon govt wants, who knows?

After the recent disinflation the RBA has predictably but uselessly cut interest rates to 1.75%.

Pointless, under 2.5% interest rate cuts do little, fund a bit more housing speculation perhaps. Useless—monetary policy is a brake not an accelerator. Meantime, those relying on interest on savings are being kicked in the guts and will have to cut their spending, hurting jobs and growth.

Abbott & Co are going to cause the mother and father of all recessions—be prepared!

TV on in another room, heard Waffles and Morriscum bloviate about “transitioning” and “investment” and “Jobson Groeth” etc.

The GDP growth figure was above expectations, from the ABC website:

Australia's economy grew 1.1 per cent in the first quarter, 3.1 per cent over the past year, its fastest quarterly growth since March 2012.

The Bureau of Statistics figures show growth was driven largely by a surge in export volumes, which contributed 1 percentage point out of the 1.1 per cent quarterly growth.

So far so good, tho note the export figure, now to drill down into the data:

The largest detractor from growth was business investment, which fell 2.2 per cent due to less engineering construction and less spending on new buildings.

By industry, production growth was mainly down to mining, up 6.2 per cent over the quarter, but financial and insurance services also grew 1.8 per cent, there was a 1.5 per cent rise in accommodation and food, and 0.9 per cent increase in arts and recreation.

Mining was also the largest contributor to economic growth over the past year, adding 0.9 percentage points to the headline 3.1 per cent annual figure.

So much for transitioning [away from mining to manufacturing] then: you are not transitioning when investment is falling and it has been falling since a big drop late last year and mnining volumes provide most of the growth. We are still dependent on mining which is not good. China is in all sorts of economic and financial problems so is not going to be a savior.

How do we stimulate investment? Company tax cuts? Nah, that just sees money in owners/shareholders pockets. Companies will invest when there is demand. The Libs’ last attempt to generate investment, instant writeoff of up to $20K purchase of plant did nothing except bring forward a few months decisions already made to buy new computers or company car etc. So tax cuts don’t address demand and so won’t stimulate investment to any worthwhile degree.

Waffles waffled on about the UK having cut company tax to 20%. “The wouldn’t do that if there was no payoff” he waffled. Errrrr Waffles, Australian growth is stronger than UK growth.

Hampering demand is the decline in employment and growth in underemployment as fulltime jobs disappear and are replaced by part time jobs. All the froth and bubble of the unemployment figures means nothing compared to the continued decline in the numbers of hours worked each month. Wages are hardly increasing at all, no basis for demand there. Obviously, the cuts in interest rates by the RBA are doing nothing at all save to keep the housing boom going a bit longer.

The shambles is going to cut income tax for high income earners. Will that increase demand? Doubt it, those on high incomes have lots of disposable income, getting a bit more won’t increase their spending.

Government can increase demand in two ways:

1. Spend money on infrastructure like road, rail, ports and a real NBN. A real NBN, FTTH/FTTDp will boost business productivity and make more efficient use of scarce medical personnel.

2. Boost NewStart and pensions or boost Rental Assistance. The unemployed and pensioners in rented accommodation have little or no disposable income so any increase in payments received from them will be spent

There are also things like an ETS and boosting the Renewable Energy Target, boosting spending on training of teachers and so on.

Abbott & Co are going to cause the mother and father of all recessions—be prepared!

TREND ESTIMATES (MONTHLY CHANGE)Employment increased 3,700 to 11,919,400.Unemployment decreased 2,200 to 724,300.Unemployment rate remained steady at 5.7%.Participation rate decreased by 0.1 pts to 64.8%.Monthly hours worked in all jobs decreased 2.3 million hours to 1,632.1 million hours.

SEASONALLY ADJUSTED ESTIMATES (MONTHLY CHANGE)Employment increased 17,900 to 11,930,700. Full-time employment remained steady at 8,156,500 and part-time employment increased 17,900 to 3,774,200.Unemployment increased 1,600 to 726,400. The number of unemployed persons looking for full-time work decreased 6,200 to 509,200 and the number of unemployed persons only looking for part-time work increased 7,800 to 217,200.Unemployment rate remained steady at 5.7%.Participation rate remained steady at 64.8%.Monthly hours worked in all jobs increased 27.7 million hours to 1,643.1 million hours.

And here’s a point you won’t find in any textbook, but all the stuff-ups of recent years should have woken us up to: when you give businesses access to the government’s coffers, a surprisingly high proportion of them lose all sense and start acting like robbers in Aladdin’s cave.